Weekly

    •    Last Candlesticks pattern: Shooting star 
    •    Time of formation: 31 Jul 2017
    •    Trend bias: Near term up

Daily

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    •    Last Candlesticks pattern: Shooting star
    •    Time of formation: 2 Aug 2017
    •    Trend bias: Up

EUR/USD – 1.1798

Although the single currency met resistance at 1.1863 last week and retreated, as euro continued finding support just above last week’s low at 1.1717 and recovered, suggesting further consolidation would be seen and another bounce to 1.1830-35 cannot be ruled out, however, said resistance at 1.1863 should hold, bring another decline later. A break of indicated support at 1.1713-17 would signal the rebound from 1.1554 has ended, bring further fall to 1.1650-60, then towards 1.1600 but said support at 1.1554 should remain intact.

On the upside, whilst recovery to 1.1830-35 cannot be ruled out, reckon upside would be limited to 1.1863 and bring another decline to aforesaid downside targets. Above indicated resistance at 1.1940 would risk retest of recent high at 1.1961 but only break there would signal the rise from 1.1554 is still in progress and extend gain to 1.2005. Looking ahead, above there would confirm recent upmove has resumed for retest of 1.2093, break there would extend the rise from 1.0340 low to 1.12150-55 first.

Recommendation: Stand aside for the time being

On the weekly chart, as euro has retreated again after meeting resistance at 1.1863 last week, retaining our view that further consolidation below indicated level at 1.1961 would be seen and test of 1.1713-17 support cannot be ruled out, however, break there is needed to signal the rebound from 1.1554 has ended, bring weakness to 1.1650-60, then towards said support at 1.1554 which is likely to hold from here. A drop below said support at 1.1554 would signal a temporary top has been formed at 1.2093, bring retracement of recent rise to 1.1500, then 1.1466 (50% Fibonacci retracement of 1.0839-1.2093) but reckon downside would be limited to 1.1400 and 1.1312-18 (previous support and 61.8% Fibonacci retracement) should hold, price should stay above previous minor resistance at 1.1296, bring another rebound.

On the upside, expect recovery to be limited to 1.1863 and resistance at 1.1940 should hold, bring another retreat. Above said resistance at 1.1961 would revive bullishness and signal early pullback from 1.2093 has ended at 1.1554, bring further gain to 1.2005, once this level is penetrated, this would confirm early rise from 1.0340 low has resumed for retest of 1.2093, above there would extend headway to 1.2150-55, then 1.2200-10 later.

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